The Rural Banking industry has come a long way. It started in 1976 when the first Rural Bank was established at Agona Nyakrom in the Central Region. Rural and Community Banks (RCBs) have therefore been in existence for forty-three (43) years and counting.

By 2008, the total RCB population had grown to 126 and by 2018 the number of banks had increased to 144 with Efiduase Rural Bank expected to join the league of RCBs by the fourth quarter of 2019, making a total of 145 with more than 800 branches or agencies spread across the 16 regions of the country.

The total number of customers of the RCBs is more than twice the customers of all the 23 universal banks put together.

Currently, RBCs have over 6.5million customers. A little over 10 years ago, that number was just a little around two million customers though the balance sheet of all RCBs put together is far less than 10 percent of the universal banking industry. The total deposits of RCBs is also about GH¢3.3 billion. RCBs also provide direct employment to more than 15,000 people across the country, and the positive multiplier effects in the rural economy is anybody’s guess. The RCBs are making a significant contribution to the growth of the rural economy. Even though, some have branches in built-up areas, their main catchment areas are concentrated in the rural neighbourhoods.

RCBs provide rural folks with loans, which most of them are able to pay back. Some of the loan products offered include SMEs, loans to salary workers, and credit to micro finance groups, facilities which have short-medium to long-tenors.

The RCBs thus take care of the marginalized, micro-business or individual who is looking for that loan of GH¢200, whose needs will not be adequately served by the universal banks. Most of these small businesses or individuals live where the RCBs are located. These people cannot afford the collateral and complex loan requirements or rigid rules set by the universal banks. Some of the RCBs even give some of their micro-loans simply based on trust. They know the customers, where they live, where their businesses are located, their behaviour and their general business conduct. So they can trust them with these little loans and advances.

Role of ARB Apex Bank

The ARB Apex Bank was set up in 2000 and began operation in 2002, to facilitate the smooth operation of the RCBs. Some of the support services offered by the ARB Apex Bank to enhance the operation of the RCBs include: cheque clearing services, bullion or cashiering services (specie movement), human resource and technical training, guidance and support services for the recruitment of the best professionals, inspection and audit of on-site and off-site operations, liquidity support for member banks, funds for on-lending for specific projects, legal assistance, advise and support for cases brought against member banks, and training on all aspects of their businesses.

Over the years, the Credit and Risk Management Department of the ARB Apex Bank has also been revamped and resourced with very experienced professionals to help RCBs manage their risks very well and to minimize loan losses and to contain their non-performing loan (NPL) books to acceptable industry levels.

RCBs have come to stay Despite the positive indices listed above, RCBs like every other going concern, have had their fair share of ups and downs. However, their ownership structure, sound business practices and the largely rural and community-based customers have always held the RCBs’ structure together like chords that cannot be broken.

For example, prior to the establishment of the ARB Apex Bank, the rural banking industry had many teething problems such as cheque clearing, specie movement, poor infrastructure, etc., which were all solved with assistance from the World Bank, Government of Ghana, Danish International Development Agency (DANIDA), the Compact One of the USA’s Millennium Challenge Account (MCA) and other development agencies. Through support from many of these development agencies and the Government of Ghana, the story of RCBs have tremendously improved. Currently, most RCBs have ultra-modern offices, networked branches, high calibre of staff, innovative products, and efficient systems.

It cannot be gainsaid that RCBs are owned by the indigenes of the communities in which they are sited.

This progressive ownership structure and communal spirit are believed to be the key ingredients, which have kept them together during the recent challenges in the financial services industry.

We believe that we have become a major force to reckon with in the banking industry and this resonates well through our tagline: “Together for Progress”.

With the many innovative services and interventions of the ARB Apex Bank, the Bank of Ghana (BoG), Development partners and the Shareholders and Directors of the RCBs, we can say with all certainty that the RCBs are resilient.

The RCB near you has come to stay. The shareholders are your kinsmen/ women. The customers live with you. The directors are selected from among the community.

The management and staff are members of the community.

Indeed, without any shred of doubt, the RCBs are resilient.